Public Disclosure Authorized Public Disclosure Authorized Mr. Enrique Vilatela Director General de Captacion de Credito Externo Direccion General de Captacion de Credito Externo Subsecretaria de Hacienda y Credito Publico Palacio Nacional Primer Patio Mariano, 4o. piso - oficina 4037 06066 Mexico, D.F., Mexico Mr. Arturo Ortiz Hidalgo Director Internacional Direccion Internacional y de Tesoreria Nacional Financiera, S.N.C. Plaza NAFINSA Insurgentes Sur 1971 Torre Sur 9o. Piso 012020 Mexico, D.F., Mexico Re: September 26, 1989 Loan No. 2858-ME (Fourth Small-and Medium-Scale Industry ) Dear Sir: Public Disclosure Authorized Please refer to the Loan Agreement dated September 30, 1987 for the above-referenced (the Loan Agreement) between the International Bank for Reconstruction and Development (the Bank) and Nacional Financiera, S.N.C. (the Borrower), and to the Guarantee Agreement of even date-herewith between the United Mexican States (the Guarantor) and the Bank (the Guarantee Agreement). In response to your request and the discussions between our respective representatives, we are pleased to inform you that the Bank agrees to amend the Loan Agreement and the Guarantee Agreement for purposes of: 1) modifying the institutional arrangements for the to reflect that FIDEIN has been dissolved; and 2) allocating the Loan proceeds among participating institutions. Therefore, the following amendments to the Loan and Guarantee Agreements are proposed: I. Loan Agreement A. Section 1.02 Public Disclosure Authorized 1. Paragraph (b) is amended to read in its entirety as follows: "(b) "Fideicomisos" means collectively FOGAIN and FOMIN;" 2. Paragraphs (c) through (f) are deleted. 3. The following new paragraphs (c) and (d) are added: "(c) "PARK " means a specific development project to be carried out by an Investment Enterprise under Part B, utilizing the proceeds Loan;" "(d) "PARK Loan" means a loan made by the Borrower to an Investment Enterprise to assist in financing a PARK and to be partially financed out of the proceeds Loan, all in accordance with
the provisions of this Agreement;" 4. Paragraph (v) is amended by deleting the words "FIDEIN Loan" and substituting the words "PARK Loan" therefor. 5. Paragraph (z) is amended by deleting the words "FIDEIN Operating Regulations" therefrom. 6. Paragraphs (g) through (ii) are relettered (e) through (gg). 7. The "and" at the end of relettered paragraph. (ff) is deleted; the period at the end of relettered paragraph (gg) is deleted and "; and" substituted therefor. 8. The following new paragraphs are added after relettered paragraph (gg): "(hh)"cetes" means Certificados de la Tesoreria de la Federacion (Federal Treasury Certificates), as defined in the Diario Oficial de la Federacion, dated November 28, 1977, published by the Guarantor; (ii) "CETES Rate" means the average annual yield, calculated monthly, on CETES with maturities of up to one month, issued during the month in which a CETES Rate is calculated, or such other index reflecting the cost of funds to the Guarantor as shall be acceptable to the Guarantor and the Bank; and (jj) "LIBOR Rate" means the average rate per annum at which term deposits in dollars maturing in 3 months are offered in the London interbank market at 11:00 a.m. (London time) two business days before the date the rate of interest on the onlent funds denominated in dollars is calculated. For this purpose, "business day", means a day on which dealings in dollar deposits between banks may be carried on in London, England, and on which banks are open in Mexico City, Mexico. (kk) "Normatividad" means the Normatividad para el Ejercicio de Creditos Provenientes de Organismos Financieros Internacionales Destinados a la Banca de Desarrollo y Fondos de Fomento con Apoyos del Gobierno Federal por Diferenciales Negativos en Tasas de Interes, (Regulations Governing the Use of Loans from International Finance Institutions to Development Banks and Funds with Assistance from the Federal Government for Negative Differentials in Interest Rates), issued by the Secretaria de Hacienda y Credito Publico and the Secretaria de Programacion y Presupuesto, by means of Oficio No. 102-B-049, dated November 18, 1988." B. Article III Loan Agreement therefor: 1. Section 3.01 (b) is deleted and the following substituted "(b) The Borrower shall enter into contractual arrangements, satisfactory to the Bank, with the Guarantor and each Fideicomiso, providing, inter alia, for: (i) onlending the proceeds Loan to: (A) FOGAIN for purposes of carrying out Parts A and E ; and (B) to FOMIN for purposes of carrying
out Parts C and E, under terms and conditions which shall include: (1) funds onlent shall be denominated and repayable either in pesos or dollars; (2) the interest rate charged on funds denominated in pesos shall be equal to the CETES Rate and shall be paid on amounts withdrawn and outstanding on a monthly basis; (3) the interest rate charged on funds denominated in dollars shall be equal to the LIBOR Rate plus one-half (0.5) percentage point and shall be paid on amounts withdrawn and outstanding on a quarterly basis; and (4) principal amounts withdrawn and outstanding shall be repaid semi-annually in accordance with the timetable set forth in the Amortization Schedule in Schedule 3 to this Agreement; and (ii) (iii) provision by the Guarantor to the Fideicomisos, in accordance with the Normatividad and by means of specific annual budgetary allocations, of all amounts required to cover: (A) the difference, if any, between the applicable CETES Rate or LIBOR Rate and the interest rate charged on the proceeds Loan onlent by the Fideicomisos; and (B) financial intermediation and operating costs of the Fideicomisos; and payment by the Guarantor to the Borrower of all amounts required by the Borrower to pay the Bank on account of principal, interest and other charges on the proceeds Loan. (c) Except as the Bank shall otherwise agree, the Borrower shall not change or fail to enforce the contractual arrangements referred to in paragraph (b) of this Section." 2. Section 3.02 is amended by: (1) deleting the words "FIDEIN Loans" from paragraph (a) thereof and substituting the words "PARK Loans" therefor; and (2) deleting the words "FIDEIN Loan" from paragraph (b) and substituting the words "PARK Loan" therefor. follows: 3. Section 3.04 is amended to read in its entirety as "Section 3.04. The Borrower, in its own capacity, in respect of Parts B and D, and as trustee Fideicomisos in respect of Parts A (1), A (2) and C (1), shall use the amounts resulting from repayments of principal, and payment of interest or dividends, as the case may be, on FOGAIN Loans, PARK Loans, FOMIN Investments, FOMIN Restructuring Investments and Micro-Enterprise Loans for purposes consistent with the objectives as described in Schedule 2 to this Agreement." 4. Section 3.06 is deleted. C. Article IV Loan Agreement 1. Section 4.01 is amended: (1) by deleting ", B" from the second line thereof; and (2) by deleting the words "FIDEIN " and substituting the words "PARK " therefor. D. Article V Loan Agreement 1. Paragraphs (a) and (d) of Section 5.01 are amended respectively by deleting the words "FIDEIN" and "FIDEIN or" from said paragraphs. E. Schedule I to the Loan Agreement 1. The table set forth in paragraph (1) of Schedule 1 to the Loan Agreement is amended to read as per the attachment hereto.
2. Paragraph 2 (a) is amended by deleting the words "FIDEIN Loan" and substituting the words "PARK Loan" therefor. F. Schedule 2 to the Loan Agreement 1. Part B (1) to the Loan Agreement is amended by: (1) deleting "1." before the first paragraph; and (2) deleting the words "FIDEIN Operating Regulations" and substituting "the Diario Oficial Guarantor dated January 22 and November 25, 1986" therefor. 2. Parts B (2) and B (3) are deleted in their entirety. G. Schedule 5 to the Loan Agreement 1. The words "FIDEIN " and "FIDEIN s" are deleted whenever they appear in such schedule and the words "PARK " and "PARK s" are substituted respectively therefor; and (b) the words "FIDEIN Loan" and "FIDEIN Loans" are deleted whenever they appear in such schedule and the words "PARK Loan" and "PARK Loans" are substituted respectively therefor. H. Schedule 6 to the Loan Agreement deleted. 1. All references to Parts B (2) and B (3) are I. Schedule 7 to the Loan Agreement 1. Paragraph 2 is amended: (1) by deleting the words "FIDEIN Loans" from clause (i) thereof and substituting the words "PARK Loans" therefor; and (2) by deleting the words "FIDEIN Loan" from clause (i) (A) thereof and substituting the words "PARK Loan" therefor. II. Guarantee Agreement 1. "Section 2.02. The Guarantor shall enter into the contractual arrangements referred to in Section 3.01 (b) Loan Agreement, with the Borrower and each Fideicomiso. Except as the Bank shall otherwise agree, the Guarantor shall not change or fail to enforce any provision Normatividad or such contractual arrangements. Please indicate your agreement to the foregoing amendments by signing and dating the enclosed copy of this letter and returning the same to us. This amendment shall take effect on the date the Loan is declared effective, or on the last date a party confirms its agreement to this amendment, whichever is later. Because ir interest in the matter copies are being sent to Mssrs. Jose Angel Gurria Trevino and Antonio Cervera Sandoval at Secretaria de Hacienda y Credito Publico. Agreed: NACIONAL FINANCIERA S.N.C. By /s/ Arturo Ortiz Hidalgo Authorized Representative Date: September 27, 1989 UNITED MEXICAN STATES INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT By /s/ Rainer B. Steckhan Director Country Department II Latin America and the Caribbean Region
By: /s/ Enrique Vilatela Authorized Representative Date: September 27, 1989 cc: Lic. Jose Angel Gurria Trevino Subsecretario de Asuntos Financieros Internacionales Secretaria de Hacienda y Credito Publico Palacio Nacional, Primer Patio Mariano piso 4 Oficina 427 Mexico, D.F. Mexico Lic. Antonio Cervera Sandoval Director de Organismos Financieros Internacionales Secretaria de Hacienda y Credito Publico Direccion General de Credito Publico Palacio Nacional - Edificio 4 Piso 4 06066 Mexico, D.F. Mexico Attachment 1 1. The table below sets forth the Categories of items to be financed out proceeds Loan, the allocation amounts Loan to each Category and the percentage of expenditures of items so to be financed in each Category: Amount Loan Allocated % of (Expressed in Expenditures Category Dollar Equivalent to be Financed (1) FOGAIN Loans for FOGAIN Subprojects under: (a) Part A (1) 1O,000,000 80% amounts Borrower under each FOGAIN Loan (b) Part A (2) 1O,000,000 (2) PARK Loans 20,000,000 80% of under Part B the amounts Borrower under each PARK Loan (3) FOMIN Investments under: (a) Part C (1) 1O,000,000 80% amounts (i) Borrower under each FOMIN Investment (b) Part C (1) 10,000,000 (ii) (4) FOMIN Restructuring Investment under: (a) Part C (1) 10,000,000 100% amounts (i)
Borrower under each FOMIN Restructuring Investment (b) Part C (1) 15,000,000 (ii) (5) Micro-Enter- 10,000,000 90% amounts prise Loans under Part D Borrower under each Micro-Enterprise Loan (6) Consultants services, training activities and equipment under: (a) Parts A (3), 4,400,000 C (2), and E (1), (2) and (3) 100% (b) Part E (4) 600,000 (7) Amount cancelled 85,000,000 pursuant to Section 6.01 of the General Conditions TOTAL 185,000,000